A person with business or investment income in Nepal pays income tax during the year in three instalments: enough to reach 40% of the estimated tax by the end of Poush, 70% by the end of Chaitra and 100% by the end of Ashadh. For FY 2083/84 those dates are 14 January 2027, 13 April 2027 and 16 July 2027.
Use the free income tax calculator to estimate the year's tax, then check the deadlines on the Nepali calendar.
Who has to pay advance tax?
Section 94 of the Income Tax Act, 2058 applies to anyone who has, or expects to have, assessable income from a business or an investment in the income year. That covers companies, firms, sole proprietors, landlords and individuals with investment income. An employee whose only income is salary does not pay instalments: the employer's monthly TDS does that job (see salary TDS and SSF for 2083/84).
The Act says an instalment of less than Rs 7,500 does not have to be paid.
How much is due, and when?
Each instalment tops your payments up to a share of the estimated tax for the year:
| Due by the end of | Cumulative share of estimated tax | FY 2083/84 BS date | AD date |
|---|---|---|---|
| Poush | 40% | Last day of Poush 2083 | 14 January 2027 |
| Chaitra | 70% | Chaitra 30, 2083 | 13 April 2027 |
| Ashadh | 100% | Ashadh 32, 2084 | 16 July 2027 |
Tax already credited to you by each date counts towards the share: earlier instalments and tax withheld from your income (for example TDS on rent, interest or service fees you received). You pay only the gap.
People who pay tax on a transaction basis follow a separate two-instalment rule in section 94(1A), in mid-January and mid-July. Check that schedule with the Inland Revenue Department.
How do you estimate the year's tax?
Under section 95, you file an estimated tax return by the date the first instalment is due. It sets out your expected assessable income from each source, your taxable income and the tax on it.
- Start from last year's results and adjust for what has changed.
- Apply the current rates — for individuals, see income tax in Nepal.
- If the year turns out differently, file a revised estimate. It only affects instalments paid after you submit it.
If you file no estimate, or the Department is not satisfied with it, the Department can set the estimate for you, for example from the previous year's tax.
Worked example
A trading firm estimates its tax for FY 2083/84 at Rs 3,00,000. By Poush end, customers have withheld Rs 20,000 of TDS on its payments, and no more TDS is withheld later in the year.
When the firm files its annual return by the end of Ashwin 2084, the instalments and TDS are deducted from the final tax. Any balance is paid then, and any excess is credited or refunded under the Act.
What if you pay too little?
Section 118 charges interest when the instalments you paid fall short of what was due on your estimate, or of 90% of the tax that turns out to have been due for that instalment period. Interest runs at the Act's general interest rate of 15% a year, for each month or part of a month, from the instalment date.
For example, if you were Rs 50,000 short at Poush end and the gap stayed open for three months, the interest is roughly Rs 50,000 × 15% × 3/12 = Rs 1,875. Separately, section 119 charges interest at the same rate on any tax not paid by its due date.
The safest approach is an honest estimate, revised as soon as the year changes direction. Instalments are easier when profit is visible month by month — see bookkeeping for small businesses. In KhataIN Business, tax deadlines show on your calendar.
Frequently asked questions
Do salaried employees pay advance tax instalments?
No, not on salary alone. Instalments apply to assessable income from a business or an investment. Salary tax is deducted by the employer every month as TDS. If you also run a business or earn rent or investment income that is not fully taxed at source, you may need to pay instalments on that part.
What are the advance tax deadlines for FY 2083/84?
14 January 2027 (Poush end) for 40%, 13 April 2027 (Chaitra end) for 70% and 16 July 2027 (Ashadh end) for 100% of the estimated tax. The full calendar is in tax deadlines in Nepal.
Does TDS deducted by my customers count towards the instalments?
Yes. Tax withheld from your income and credited by the instalment date counts towards each share, so you only pay the difference.
Can I change my estimate during the year?
Yes. You can file a revised estimate with reasons. It applies to the instalments due after you file it, not to ones already past.
Sources
- Income Tax Act, 2058 — sections 2 (general interest rate), 94, 95, 118 and 119, as published by the Inland Revenue Department (ird.gov.np) and the Nepal Law Commission (lawcommission.gov.np).
- Institute of Chartered Accountants of Nepal (ICAN), Highlights of Federal Budget of Nepal FY 2083/84 — no change to the instalment sections in the Finance Act 2083/84.
Last checked: 13 November 2026 (Kartik 27, 2083). Confirm your own situation with the Inland Revenue Department or a registered tax professional.